La. debt collection agency being pieced together

By MELINDA DESLATTE -
Associated Press -
Thursday, February 27, 2014

BATON ROUGE, La. (AP) - Louisiana’s revenue department has been working for months to create a new debt collection office, but its chief said Thursday it will be years before state government has a comprehensive system to attack delinquent accounts.

Revenue Secretary Tim Barfield said Louisiana is on track with how other states rolled out similar efforts, describing the detailed work required to build an integrated and automated debt collection system across 200 state agencies.

“If you can get to a steady state (of collection) at a two- or three-year period, you’ll have been excellent compared to other states, so that’s what we’re driving to,” he told the Cash Management Review Board, a panel of state officials that asked for a progress update.

Lawmakers established the Office of Debt Recovery last year, seeking to generate new money for the state treasury by bolstering efforts to collect back-owed debts. They top $1 billion across state government.

The office has the authority to revoke licenses, seize bank accounts and take tax refunds.

Barfield said his department is working with agencies to develop individual collection agreements and to assess the types of delinquent accounts they have. He’s focused first on the top six departments that oversee more than 90 percent of the back-owed debts, including the health, public safety and corrections departments.

The state has put out a request for contract proposals to create a new centralized, debt-management system.

Meanwhile, 56 percent of banks in the state - 205 out of 365 banks - have agreed to participate in a system that will let the state seize money from accounts to address back-owed debts, Barfield said.

“I’m happy where we are today. I certainly have a sense of urgency and want to keep pushing this through. I think we’re in pretty good spot,” he said.

Treasurer John Kennedy and Rep. Chris Broadwater, sponsor of the legislation creating the debt recovery office, praised the work done so far. Broadwater acknowledged it’s been slower-going than he anticipated when he was pushing the bill’s passage.

“Passing it was the easy part. Doing it, as you know, was the hard part,” Broadwater, R-Hammond, told Barfield.

Kennedy said he was particularly pleased with the rate of participation from banks, which are under no obligation to work with the state in its beefed-up debt collection efforts.

The recovery office won’t handle collection efforts for agencies that have agreements for the attorney general's office to do the work. It also won’t handle debts owed to federal social services programs or back-owed unemployment compensation, which falls under another collection process.